EXCELLENT FANNIE NOTE HOLDER

8/8/2019 EXCELLENT FANNIE NOTE HOLDER

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Announcement 08-12 May 23, 200

Amends these Guides: Servicing

Note Holder Status for Legal Proceedings Conducted in the

Servicers Name

Introduction

Currently, the Fannie Mae Servicing Guide grants servicers, acting in their own names,

the authority to represent Fannie Maes interests in foreclosure proceedings as holder ofthe mortgage note. With this Announcement, Fannie Mae is clarifying that the ability of

the servicer to represent Fannie Maes interests as holder of the mortgage note also

applies to bankruptcy, probate, and other legal proceedings. In order to more fullydescribe Fannie Maes policies with regard to the servicers note holder status, a new

section of the Servicing Guide has been created and is outlined below.

New Servicing Guide Section

Servicing Guide, Part I, Chapter 2, Section 202.06, Note Holder Status for Legal

Proceedings Conducted in the Servicers Name

Fannie Mae is at all times the owner of the mortgage note, whether the note is in Fannie

Maes portfolio or whether owned as trustee, for example, as trustee for an MBS trust. In

addition, Fannie Mae at all times has possession of and is the holder of the mortgagenote, except in the limited circumstances expressly described below. Fannie Mae may

have direct possession of the note or a custodian may have custody of the note. If FannieMae possesses the note through a document custodian, the document custodian has

custody of the note for Fannie Maes exclusive use and benefit.

Announcement 08-12 Page 1


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Temporary Possession by the Servicer

In order to ensure that a servicer is able to perform the services and duties incident to the

servicing of the mortgage loan, Fannie Mae temporarily gives the servicer possession of

the mortgage note whenever the servicer, acting in its own name, represents FannieMaes interests in

foreclosure actions, bankruptcy cases, probate proceedings, or other legal proceedings.This temporary transfer of possession occurs automatically and immediately upon thecommencement of the servicers representation, in its name, of our interests in the

foreclosure, bankruptcy, probate, or other legal proceeding. When Fannie Mae transfers

possession, the servicer becomes the holder of the note as follows:

If a note is held at Fannie Maes document delivery facility, Fannie Mae haspossession of the note on behalf of the servicer so that the servicer has constructivepossession of the note and the servicer shall be the holder of the note and is

authorized and entitled to enforce the note in the name of the servicer for FannieMaes benefit.

If the note is held by a document custodian on Fannie Maes behalf, the custodianalso has possession of the note on behalf of the servicer so that the servicer has

constructive possession of the note and the servicer shall be the holder of the note and

is authorized and entitled to enforce the note in the name of the servicer for Fannie

Maes benefit.

Physical Possession of the Note by the ServicerIn most cases, a servicer will have a copy of the mortgage note. If a servicer determines

that it needs physical possession of the original note to represent Fannie Maes interestsin a foreclosure, bankruptcy, probate, or other legal proceeding, the servicer may obtain

physical possession of the original note.

If Fannie Maes possession of the original note is direct because the custody documents

are at its document delivery facility, the servicer should submit a request to obtain the

original note and any other custody documents that are needed to the CustodyDepartment through the Loan Document Request System (LDRS) on Fannie Maes Web

site (www.efanniemae.com).

If Fannie Mae possesses the original note through a third party document custodian thathas custody of the note, the servicer should submit a Request for Release/Return ofDocuments (Form 2009) to Fannie Maes custodian to obtain the note and any other

custody documents that are needed.

In either case, the servicer should specify whether the original note is required or whether

the request is for a copy.

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Reversion of Possession to Fannie Mae

At the conclusion of the servicers representation of Fannie Maes interests in the

foreclosure, bankruptcy, probate, or other legal proceeding, or upon the servicer ceasing

to service the loan for any reason, possession automatically reverts to Fannie Mae, andFannie Mae resumes being the holder, just as it was before the foreclosure, bankruptcy,

probate, or other legal proceeding. If the servicer has obtained physical possession of theoriginal note, it must be returned to Fannie Mae or the document custodian, as applicable.The temporary transfer of possession, and any reversion of possession to Fannie Mae, are

evidenced and memorialized by this Section of the Guide. This Guide provision may be

relied upon by a Court to establish that the servicer conducting the foreclosure,

bankruptcy, probate, or other legal proceeding in its name has possession, and is theholder, of the note during the foreclosure, bankruptcy, probate, or other legal proceeding,

unless the Court is otherwise notified by Fannie Mae.

Revised Servicing Guide Section

Fannie Mae is amending the existing Servicing Guide section that currently references thenote holder provision for foreclosures. Pertinent information from this section has been

removed and incorporated into the new section above. The revised section that followsreplaces in its entirety the existing section in the Servicing Guide and servicers should

refer to this Announcement regarding this topic until the Servicing Guide is updated at a

future date.

Servicing Guide, Part VIII, Chapter 1, Section 102: Initiation of Foreclosure

Proceedings

Foreclosure Proceedings for First Mortgage Loans

Foreclosure proceedings for a first mortgage can begin whenever at least three fullmonthly installments are past due. Foreclosure proceedings may begin at once for anymortgage if the borrower is not eligible for relief from foreclosure under the Soldiers and

Servicemembers Civil Relief Act (or any state law that similarly restricts the right to

foreclose) and the property has been abandoned or vacated by the borrower and it isapparent that the borrower does not intend to make the mortgage payments. In addition,

foreclosure proceedings for any mortgage may be started immediately if

the borrower was advised in writing of the relief provisions that were available andhis or her written response indicated a lack of interest in fulfilling the mortgageobligation (or gave permission for the commencement of foreclosure proceedings, if

the borrower was subject to the provisions of the Servicemembers Civil Relief Act or

any state law that similarly restricts the right to foreclose); or

income from rental of the property is not being applied to the mortgage payments andarrangements cannot be made to apply it, and it has been established that the

borrower is not eligible for relief under the Servicemembers Civil Relief Act or anystate law that similarly restricts the right to foreclose. (Refer to Part III, Chapter 1,

Exhibit 1 for additional information.)



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Fannie Mae requires a servicer to contact its servicing consultant, portfolio manager, orFannie Maes Servicing Solutions Center before it initiates foreclosure proceedings for an

eMortgage. If the security property is located in a state in which there are Fannie Mae-

retained attorneys (or trustees), the servicer must use one of the firms we have retainedfor the state. If there are not any Fannie Mae-retained attorneys (or trustees) designated

for the state in which the security property is located, the servicer may retain its ownattorney, but Fannie Mae will require that attorney to work closely with an attorney thatFannie Mae designates.

Foreclosure Proceedings for Second Mortgages

Foreclosure proceedings for a second mortgage can begin when at least two full monthlyinstallments are past due. As long as the servicer has complied with the requirements of

the Servicemembers Civil Relief Act (if applicable) and any state law that restricts the

right to foreclose, it can start foreclosure proceedings for a second mortgage immediately

if the first mortgage is in default and the second mortgage instrument includes a provisionthat the second mortgage will be considered in default, regardless of the status of its

payments, if the first mortgage is in default.

Physical Possession of the Note by the Servicer

In most cases, a servicer will have a copy of the mortgage note that it can use to begin the

foreclosure process. However, some jurisdictions require that the servicer produce theoriginal note before or shortly after initiating foreclosure proceedings.

If Fannie Maes possession of the note is direct because the custody documents are at the

document delivery facility, to obtain the note and any other custody documents that areneeded, the servicer should submit a request to the Custody Department through the LoanDocument Request System (LDRS) on Fannie Maes Web site (www.efanniemae.com).

If Fannie Mae possesses the note through a document custodian that has custody of those

documents, to obtain the note and any other custody documents that are needed, theservicer should submit a Request for Release/Return of Documents (Form 2009) to

Fannie Maes custodian.

In either case, the servicer should specify whether the original note is required or whether

the request is for a copy.

Effective Date

The changes outlined in this Announcement are effective immediately.

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Servicers should contact their Servicing Consultant, Portfolio Manager, or Fannie MaesNational Servicing Organization's Servicing Solutions Center at 1-888-326-6438 if they

have questions about Announcement 08-12.

Michael A. QuinnSenior Vice President

Single-Family Risk Officer
